Correlation Between SBM Offshore and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Uber Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SBM Offshore and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM Offshore NV and Uber Technologies, you can compare the effects of market volatilities on SBM Offshore and Uber Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SBM Offshore with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Uber Technologies.
Diversification Opportunities for SBM Offshore and Uber Technologies
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SBM and Uber is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and SBM Offshore is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SBM Offshore NV are associated (or correlated) with Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of SBM Offshore i.e., SBM Offshore and Uber Technologies go up and down completely randomly.
Pair Corralation between SBM Offshore and Uber Technologies
Assuming the 90 days trading horizon SBM Offshore is expected to generate 3.71 times less return on investment than Uber Technologies. In addition to that, SBM Offshore is 2.57 times more volatile than Uber Technologies. It trades about 0.02 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.21 per unit of volatility. If you would invest 6,920 in Uber Technologies on September 4, 2024 and sell it today you would earn a total of 290.00 from holding Uber Technologies or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
SBM Offshore NV vs. Uber Technologies
Performance |
| Timeline |
| SBM Offshore NV |
| Uber Technologies |
SBM Offshore and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Uber Technologies
The main advantage of trading using opposite SBM Offshore and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Uber Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Uber Technologies will offset losses from the drop in Uber Technologies' long position.| SBM Offshore vs. Uber Technologies | SBM Offshore vs. Roper Technologies | SBM Offshore vs. Spirent Communications plc | SBM Offshore vs. Raytheon Technologies Corp |
| Uber Technologies vs. CVR Energy | Uber Technologies vs. Viridian Therapeutics | Uber Technologies vs. Nationwide Building Society | Uber Technologies vs. Dollar Tree |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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